Trail of Bits
Trail of Bits
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Last updated: Aug 29, 2022
Composable Finance aims to change Web3 landscape for the better by connecting currently isolated blockchains and layer 2 scaling solutions. If it is reached, this ambitious goal will turn the platform into a hyper liquidity infrastructure layer for DeFi.
Composable Finance was founded in 2021, initially conceived at the Advanced Blockchain AG’s incubator program. Later, the platform raised a total of $7 million in a seed round from Advanced Blockchain AG and Rarestone Capital VC firms focused on Web3 development. The project is headquartered in Berlin, Germany.
Composable Finance aims to bridge most of currently existing blockchains and layer 2 solutions. It is doing so by means of the so-called Innovation Availability Layer (IAL), which is meant to run on a future Composable Finance parachain on Polkadot.
The cross-chain and cross-layer interoperability are achieved through a new type of virtual machine developed at Composable Finance which is called Composable Cross-Chain VM (XCVM). It is designed to autonomously maintain and execute smart contracts across a wide range of layer 1 and layer 2 networks.
Next comes the Routing Layer which allows users to perform ecosystem-agnostic actions via an incentivized pathway selection. This layer’s job is to aggregate all possible solutions for a chosen action in order to propose an optimal transaction route across all potential layers and chains.
The platform brands smart contracts deployed on its parachains as “palettes” giving them artsy names such as Mosaic or Picasso.
Mosaic is a cross-layer system designated for transferring liquidity between various chains and L2s described as an optimistic bridging solution. Basically, it is a network of bridges that operate through a relayer network the Composable Finance app has at its core. Relayers run the network and ensure the liquidity is moving in the right direction. This is achieved via interactions with smart contracts on the source and destination chains and layers. Relayers also pack transactions into bundles for higher efficiency and throughput. All transactions are getting approved by validators who secure the network by staking LAYR and building up consensus with other nodes.
Currently, Mosaic is integrated with the Ethereum mainnet, a number of scaling and layer 2 solutions such as Arbitrium, Avalanche C-Chain, Polygon, and Fantom, as well as Moonriver, a parachain on Kusama that serves as a connection to the Polkadot ecosystem. Mosaic is still a work in progress, and its initial implementation provides a bridge between Ethereum, Polygon, and Arbitrum with other functionality to be added later.
One of the most recent products of the Composable Labs team is Mural, a cross-chain bridge that supports transferring of NFTs across the Ethereum mainnet, Polygon, Arbitrum, and Moonriver networks.
Picasso became the first parachain procured by Composable Finance’s team and is based on Kusama, Polkadot’s canary network that operates at large as a testing ground for projects wishing to expand onto the DOT ecosystem.
The Composable Finance wallet support includes Metamask and any wallet integrating the WalletConnect protocol.
LAYR is the native governance and utility token of Composable parachain. The token resides on Polkadot and Ethereum networks. LAYR’s total supply is capped at 100 million coins. It can be staked for reduced-fee transactions, or to earn part of the protocol’s fees.
PICA is the other native governance token for Picasso, Composable’s parachain on Kusama that resides solely on the canary network. Its total supply is 10 billion coins. PICA holders can vote on which pallets to be incorporated onto the Picasso Network and control the treasury funds usage.
While being a work in progress, Composable Finance has already attracted a number of follow-up projects preparing to join the future ecosystem. Following its Ecosystem-as-a-Service model, Composable is financing these initiatives through the Composable Grant Program. Instrumental Finance, Angular Finance, Bribe Protocol, Whirlpool, and Arturo Finance became the first DeFi protocols to receive support from the Composable team.
Though most of the announced projects of Composable Finance are still in development, the platform’s biggest near-term ambition is to complete development and boost the usage of each layer of the Composable stack.
As described by the team, the next phase for Composable is to integrate Picasso with the inter-blockchain communication protocol (IBC). This will enable cross-chain and cross-layer communications with any blockchain that uses IBC.
Other than the mentioned above, Composable is working on adding more palettes to its parachains to make them more attractive to developers to build their dApps.
On its docs page, the Composable Finance platform lists all the employees and contractors some of whom have chosen to remain anonymous.
Cosmin Grigore is the lead developer and CEO of Composable Finance. He founded the platform in 2020 after a long career in computer science. Previously, Cosmin worked as a dev lead for Nakamo.to, an Advanced Blockchain AG portfolio company.
The second person in charge of Composable Finance is an anonymous Head of Product who goes under the pseudonym 0xbrainjar. He also leads the Composable Labs.
In February 2022, after exposing the identity of 0xSifu - the treasury manager for Wonderland, the Twitter user zachxbt uncovered 0xbrainjar’s identity in a thread on the social network. The identity of Composable Finance’s Head of Product was claimed to be that of Omar Kazi. Omar Kazi was charged with fraud by the SEC in April 2019 after “misleading investors in financing an unregistered hedge fund”, his first two blockchain projects had anonymous teams and were targets of large hacks and haven’t fully recovered since the attacks. These projects are Warp Finance and Force DAO.
Omar Kazi confirmed the allegations over his identity, however, he stated that the SEC case was handled after a $25,000 fine and didn’t bring any charges. He went on to say that his team is working hard on the attacks they had fallen victim to in the past, and have been releasing IOUs to help reimburse damaged users.
Composable Finance audits can be found in the protocol dashboard on this webpage.
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